Lucas Charleston Speaks with Bloomberg about 2020 Outlook for Private Credit
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Akin Gump corporate partner Lucas Charleston has been quoted in the Bloomberg article “Private Credit Poised for Active First Half of 2020: Akin Gump.” Charleston offers his thoughts on the state of the private credit market heading into the new year.
Charleston suggested that borrowers lacking any hard assets could struggle to tap the leveraged loan market in 2020, thereby creating an opening for private credit firms. He attributed this to the syndicated market not having “a lot of appetite for those credits right now.”
Charleston pointed out that the interest rates lenders “are able to obtain in a syndicated deal generally tend to be mid-single digits but jump up significantly for some of these credits without hard assets turning to the private credit market to low double digits, coupled with warrants.”
With the presidential election less than 11 months away and interest rates remaining historically low, Charleston said he expects companies will “want to be opportunistic.” Private credit, he added, “is trying to capture business from the banks and also compete with each other for deals. … You’re going to continue to see more institutions in the private debt space and more and more dollars being raised.”
